Monthly Archives: May 2012

This doubtless reflects my political prejudices, but I think Sarkozy just about edged the French presidential election debate with Francois Hollande tonight. But Sarko certainly didn’t land a knock-out blow. So, unless the polls are wildly out, his presidency is drawing to a close. The French vote on Sunday, and Sarkozy seems to be 7-8 points behind Hollande. Read more

Chen Guangcheng in a wheelchair pushed by a nurse at the Chaoyang hospital in Beijing (Getty)

The blind legal activist Chen Guangcheng had been under home arrest for 19 months until last week, when he escaped, took shelter at the US embassy, and appealed in a video for Wen Jiabao, the Chinese premier, to intervene on his behalf.

Mr Chen left the US embassy on Wednesday for a Beijing hospital as part of a deal brokered by the US. But within hours confusion was surrounding that deal and Mr Chen was telling news agencies he wanted to leave China.

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After my column arguing that there is “no alternative to austerity”, I seem to have become an unofficial ringleader of the backlash against the argument that “austerity in Europe is mad”. This was, of course, itself a backlash against austerity itself. Now, as people respond to my article, we are several iterations back. I think it’s the backlash against the backlash against the backlash.

But enough of this hall-of-mirrors. Writing on his blog today, Paul Krugman suggests that I was setting up a straw-man – by arguing against Keynesianism in Spain and Italy. He agrees that this is not feasible. The point, he says, is that you need a Keynesian response in Europe, as a whole. In this, as Krugman points out, he is echoing a critique made by Ryan Avent, over at The Economist. Read more

President Evo Morales of Bolivia – following in Argentina's nationalisation footsteps? Reuters

There seems to be a domino effect in Latin America. Two weeks after President Cristina Fernández nationalised Spanish oil company Repsol’s stake in Argentina’s YPF, President Evo Morales has nationalised Spanish electricity grid operator Red Eléctrica’s business in neighbouring Bolivia.

In both cases, troops were sent in to underline the glorious nationalism of the occasion. But does this mark a new wave of populism and nationalisations in the region? Almost certainly not. Read more

François Hollande, the Socialist candidate and frontrunner for the French presidency. Getty Images

François Hollande, the Socialist candidate and frontrunner for the French presidency. Getty Images

If François Hollande duly wins the French presidency on Sunday night, there is a good argument that he will be an “accidental president”. Until Dominique Strauss-Kahn was caught up in a sex scandal he, not Hollande, had been the strong favourite to be the Socialist Party nominee for the presidency. Read more

Luisa Pinales, who could no longer make mortgage payments after her business closed in 2007, sweeps her apartment in Madrid on March 5, 2012. She was evicted on April 27. The graffiti reads "Stop eviction". REUTERS/Juan Medina

Last week it emerged that almost one in four Spaniards is unemployed.  For young people, the situation is worse – the jobless rate among under 25-year-olds has reached an eye-watering 52 per cent. As incomes have fallen, many householders find it more difficult to keep up with their mortgage payments; eviction notices – like the one received in January by Luisa Pinales, pictured above – have been served. Meanwhile, the centre-right government of Mariano Rajoy is hewing desperately to a programme of austerity, in the hopes of meeting an EU-imposed target of reducing Spain’s budget deficit to 3 per cent of gross domestic product in 2013. To get a sense of how difficult that will be, consider that in 2011, Spain’s budget deficit was 8.5 per cent of GDP. Investors in the sovereign debt markets can sense the scale of the challenge, and have demanded a higher premium for lending to the beleaguered government. Read more

By Gideon Rachman

Spanish unemployment is nearing 25 per cent. The suicide rate is climbing in Greece. Britain is in a double-dip recession. Amid all this pain, the cry is growing louder. Austerity policies in Europe are dangerous. Someone has to stop this madness.